THE UNIVERSITY of EDINBURGH

DEGREE REGULATIONS & PROGRAMMES OF STUDY 2020/2021

Information in the Degree Programme Tables may still be subject to change in response to Covid-19

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DRPS : Course Catalogue : Business School : Common Courses (Management School)

Postgraduate Course: Energy Finance (CMSE11153)

Course Outline
SchoolBusiness School CollegeCollege of Arts, Humanities and Social Sciences
Credit level (Normal year taken)SCQF Level 11 (Postgraduate) AvailabilityAvailable to all students
SCQF Credits15 ECTS Credits7.5
SummaryThe course aims to integrate conventional finance with energy finance, and to provide a basis for understanding the links between these and carbon finance.
Course description The Course Organiser will draw on both theoretical and applied concepts and will be taught by experienced practitioners, with knowledge of structured and energy finance as well as analytical skills in energy project finance. In addition to introducing the students to the wider literature on energy finance, IEA, the World Bank, Asian Development Bank and other commercial bank publications and case studies will be used to ensure that students will come away from the course with specific skills in the evaluation of risks and opportunities associated with energy finance and learn how to analyse risks through the @risk software. The basics of corporate finance will be taught in an intensive way in the first week of the session.

The International Energy Agency (IEA) estimates that US$10 trillion incremental energy investment will be needed between 2010 and 2030 to stabilize greenhouse gas emissions. Energy consumption accounts for the largest percentage of global greenhouse gas emissions, and the energy sector is likely to dominate global low-carbon investment in the decades to come. Thus energy finance is a core component of carbon finance. The trading of energy, and financial products associated with energy and carbon, is increasing at a rapid pace. This requires an energy or carbon finance professional to have a systemic understanding of the segments of the energy industry, the structure of energy markets, the uncertainties of energy policy, the development of energy commodities derivatives, the evolution of energy technologies and the challenges of financing and operating an energy project.
Entry Requirements (not applicable to Visiting Students)
Pre-requisites Co-requisites
Prohibited Combinations Other requirements For Business School PG students only, or by special permission of the School. Please contact the course secretary.
Information for Visiting Students
Pre-requisitesNone
High Demand Course? Yes
Course Delivery Information
Not being delivered
Learning Outcomes
On completion of this course, the student will be able to:
  1. Explain and apply principles of finance in the energy sector
  2. Describe and discuss critically the principal features of the energy industry, energy technologies, energy markets and capital markets
  3. Apply some of the main techniques of financial analysis, risk analysis and risk management, including basic stochastic modelling techniques applied to an energy project in situations of uncertainty
  4. Critically evaluate financial decision-making within an energy firm
  5. Develop strategies for mitigating and/or transferring energy risks
Reading List
GARP, 2009. Foundations of Energy Risk Management, Wiley Finance.

Fundamentals of Corporate Finance (Sixth Edition) by Richard A. Brealey, Stewart C. Myers and Alan J. Marcus. McGraw-Hill International Edition

James, T. 2008. Energy Markets: Price Risk Management and Trading, Wiley Finance.

Mott MacDonald, 2011. UK Electricity Generation Costs: Update.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/65716/71-uk-electricity-generation-costs-update-.pdf
(Methodology Section)

Savage, S. L. 2003. Decision Making with Insight, South-Western College Pub.

World Energy Council, 2013. World Energy Scenarios: Composing Energy Futures to 2050. http://www.worldenergy.org/publications/2013/world-energy-scenarios-composing-energy-futures-to-2050/

International Energy Agency, 2014. Work Energy Investment Outlook. http://www.iea.org/publications/freepublications/publication/weio2014.pdf
Additional Information
Graduate Attributes and Skills Cognitive Skills:
After completing this course, students should be able to:

Understand essential knowledge in corporate finance
Critically evaluate press coverage of energy finance issues
Use a financial calculator for simple discounted cash flow analysis and bond valuation
Use Excel-based modelling and simulation tools
Co-operate with others from different professional, educational and cultural backgrounds to produce group analysis and present the results of group work

Subject Specific Skills:
After completing this course, students should be able to:
Undertake simple financial computations, namely compounding and discounting in order to derive future values and present values for a series of cash flows
Apply concepts in energy economics, such as levelised cost of energy, externalities
Identify key stages in financing an energy project
Categorise and quantify energy risk exposures
Use basic financial methodologies, namely present and future value calculations, to solve problems in finance
KeywordsEF
Contacts
Course organiserDr Xi Liang
Tel: (0131 6)51 5328
Email: Xi.Liang@ed.ac.uk
Course secretaryMrs Kelly-Ann De Wet
Tel: (0131 6)50 8071
Email: K.deWet@ed.ac.uk
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